Erika and kitty who are twins just received 10000 each for

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Erika and Kitty, who are twins, just received $10,000 each for their 22th birthdays. They both have aspirations to become millionaires. Each plans to make a $5,000 annual contribution to her "early retirement fund" on her birthday, beginning a year from today. Erika opened an account with the Safety First Bond Fund, a mutual fund that invests in high quality bonds whose investors have earned 8% per year in the past. Kitty invested in the New Issue Bio-Tech Fund, which invests in small, newly issued bio-tech stocks and whose investors on average have earned 13% per year in the fund's relatively short history. Round all answers to the nearest hundredth

a. If Erika's funds earn the same returns in the future as in the past, how old will she be when she becomes a millionaire?
years

b. If Kitty's funds earn the same returns in the future as in the past, how old will she be when she becomes a millionaire?
years

c. How large would Erika's annual contributions have to be for her to become a millionaire at the same age as Kitty, assuming their expected returns are realized?

Reference no: EM13572717

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